Barclays-Led Bank Group Loses Millions on Covis Debt Financing
- High-yield investors wary of Apollo-owned Covis on credit risk
- Banks underwriting fees are wiped out, paying to fund debt
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Banks led by Barclays Plc have lost millions of dollars of their own money plus wiped out fees from underwriting more than $1.2 billion of bonds and loans for Covis Pharmaceuticals Inc. that proved particularly hard to sell.
The banks were already stuck with more than $300 million of loans to the company that they couldn’t sell, and have now sold another $945 million of loans at a steep discount to face value, according to people with knowledge of the matter. The weak demand for the company’s debt is enough to erase more than $20 million of underwriting fees that banks also including HSBC Holdings Plc and Mizuho Financial Group Inc. were due to receive on the deal, plus pile on additional losses for the banks beyond that.